Feds may cut $1.2 million from housing authority

The Sarasota Housing Authority shows off redevelopment projects in Newtown with a grand opening ceremony for the Janie's Garden complex followed by a ceremonial start to demolition of the Mediterranean Apartments nearby.

Published: Wednesday, January 4, 2012 at 12:07 p.m.

Last Modified: Wednesday, January 4, 2012 at 7:27 p.m.

SARASOTA - Federal cuts to housing programs announced this week could forever handicap Sarasota's public housing agency, which will lose more than half its administrative funding from Washington.

The cuts could also stall the rebuild of a major public housing complex in Venice, and Bradenton will lose about a sixth of its federal funding for low-income housing as well, officials there said.

But Sarasota, and its aggressive public housing program, will face the largest cut — a $1.2 million reduction that is 53 percent of its overall federal funding.

Sarasota officials called the cut for 2012 "draconian" and say they fear tough times ahead for Sarasota's primary housing resource for needy families and the elderly.

The U.S. Department of Housing and Urban Development announced it will pare subsidies in 2012 by more than $840 million through complicated calculations that hit flush housing agencies hardest.

"Really, I blame HUD," said Bill Russell, a former HUD official who took over the Sarasota Housing Authority in 2005. "It's just ugly. They're taking reserves we have built up for a rainy day."

Those cuts are expected to deepen, housing officials say, as agencies receiving less this year will have a weaker bargaining position next year at the same time congressional budget woes intensify.

In 2011, the Sarasota Housing Authority received about $2.2 million from HUD to manage more than 420 existing units.

That allocation will drop to about $970,000 this year if federal officials stick to their current budget.

"The industry has never seen anything like this," Russell said. "A 53 percent reduction? No one has dealt with this before."

Venice officials are trying to figure out what the cuts mean to their plans to rebuild the Grove Terrace public housing complex, demolished in 2009. The city has secured $500,000 in grants so far, but was expecting $1.5 million in federal funding this spring to move forward on the first phase of 60 senior housing units in the newly named Venetian Walk, near the Intracoastal Waterway.

"It's a tragedy because we tore down the only low-income housing" in Venice, said City Council Member Bob Daniels, who sat on the Venice Housing Authority board as an ex-officio member until November. "To have that kind of cut in funding is pathetic."

While Venice public housing is independent from Sarasota, it receives housing vouchers and funding through the county Office of Housing and Community Development. Venice has contracted with Primerica Group of Tampa to rebuild its low-income housing, but the company is also waiting on tax credits through HUD, adding another potential obstacle.

Sarasota was hit especially hard because $750 million of HUD's budget cuts came in the form of allocation adjustments — a move that cuts the money agencies will receive in the future based on what they have stored in reserves.

Because of federal regulations that govern public housing and Section 8 vouchers, housing agencies like Sarasota's cannot increase rent to make up the money like a private property owner might.

Russell said the authority will immediately feel the sting, which could mean layoffs or lapses in maintenance and services for tenants, everything from landscaping to plumbing repairs for units, some of which are more than 70 years old.

The cuts also jeopardize the quality of new local housing projects, including the recent $14 million addition to Janie's Garden in Newtown, Sarasota's poorest neighborhood.

The completion of the second phase of Janie's Garden — and 68 new affordable housing units — was presented in December to fanfare and optimism for urban renewal by the agency, which until recently suffered from poor management and intense public criticism.

That optimism has been crippled by the cuts, said John Colón, board president of the Sarasota Housing Authority.

"This is going to hurt housing authorities going forward in perpetuity," Colón said. "This is like someone comes along and says 'You've got too much money in your savings account. We're going to take it.'"

The clawback of federal money effectively forces housing agencies to spend their reserves, Colón said, and fosters a "use it or lose it mentality" when agencies receive taxpayer dollars.

"They're going to all the housing authorities that have been responsible, who haven't squandered and wasted money," he said.

Housing reserves are especially important in Florida, housing experts say, because of the high cost of insurance associated with the threat of hurricanes, floods and wind.

Wenston DeSue, executive director of the much smaller Bradenton Housing Authority, said the wave of cuts will cause a "domino effect" as agencies face greater need in their communities at the same time resources dwindle.

"Now more than ever people need quality affordable housing," DeSue said. "You're also talking about the disabled, the elderly, veterans. Everybody is in a state of need."

The Bradenton Housing Authority is bracing for a 13 percent drop from the $1.4 million it received from HUD in 2011.

HUD cuts could also affect housing initiatives by Sarasota County, whose joint Office of Housing and Community Development relies in part on community and housing grants passed down from Washington.

Don Hadsell, director of the city/county housing office, said his office has not yet heard what its HUD allocation will be for 2012.

Housing authority officials have filed an appeal with HUD, citing specifically the area's high cost for insurance. That appeal is expected to be reviewed by February.

<p><em>SARASOTA</em> - Federal cuts to housing programs announced this week could forever handicap Sarasota's public housing agency, which will lose more than half its administrative funding from Washington.</p><p>The cuts could also stall the rebuild of a major public housing complex in Venice, and Bradenton will lose about a sixth of its federal funding for low-income housing as well, officials there said.</p><p>But Sarasota, and its aggressive public housing program, will face the largest cut — a $1.2 million reduction that is 53 percent of its overall federal funding.</p><p>Sarasota officials called the cut for 2012 "draconian" and say they fear tough times ahead for Sarasota's primary housing resource for needy families and the elderly.</p><p>The U.S. Department of Housing and Urban Development announced it will pare subsidies in 2012 by more than $840 million through complicated calculations that hit flush housing agencies hardest.</p><p>"Really, I blame HUD," said Bill Russell, a former HUD official who took over the Sarasota Housing Authority in 2005. "It's just ugly. They're taking reserves we have built up for a rainy day."</p><p>Those cuts are expected to deepen, housing officials say, as agencies receiving less this year will have a weaker bargaining position next year at the same time congressional budget woes intensify.</p><p>In 2011, the Sarasota Housing Authority received about $2.2 million from HUD to manage more than 420 existing units.</p><p>That allocation will drop to about $970,000 this year if federal officials stick to their current budget. </p><p>"The industry has never seen anything like this," Russell said. "A 53 percent reduction? No one has dealt with this before."</p><p>Venice officials are trying to figure out what the cuts mean to their plans to rebuild the Grove Terrace public housing complex, demolished in 2009. The city has secured $500,000 in grants so far, but was expecting $1.5 million in federal funding this spring to move forward on the first phase of 60 senior housing units in the newly named Venetian Walk, near the Intracoastal Waterway.</p><p>"It's a tragedy because we tore down the only low-income housing" in Venice, said City Council Member Bob Daniels, who sat on the Venice Housing Authority board as an ex-officio member until November. "To have that kind of cut in funding is pathetic."</p><p>While Venice public housing is independent from Sarasota, it receives housing vouchers and funding through the county Office of Housing and Community Development. Venice has contracted with Primerica Group of Tampa to rebuild its low-income housing, but the company is also waiting on tax credits through HUD, adding another potential obstacle.</p><p>Sarasota was hit especially hard because $750 million of HUD's budget cuts came in the form of allocation adjustments — a move that cuts the money agencies will receive in the future based on what they have stored in reserves.</p><p>Because of federal regulations that govern public housing and Section 8 vouchers, housing agencies like Sarasota's cannot increase rent to make up the money like a private property owner might.</p><p>Russell said the authority will immediately feel the sting, which could mean layoffs or lapses in maintenance and services for tenants, everything from landscaping to plumbing repairs for units, some of which are more than 70 years old.</p><p>The cuts also jeopardize the quality of new local housing projects, including the recent $14 million addition to Janie's Garden in Newtown, Sarasota's poorest neighborhood.</p><p>The completion of the second phase of Janie's Garden — and 68 new affordable housing units — was presented in December to fanfare and optimism for urban renewal by the agency, which until recently suffered from poor management and intense public criticism.</p><p>That optimism has been crippled by the cuts, said John Colón, board president of the Sarasota Housing Authority.</p><p>"This is going to hurt housing authorities going forward in perpetuity," Colón said. "This is like someone comes along and says 'You've got too much money in your savings account. We're going to take it.'"</p><p>The clawback of federal money effectively forces housing agencies to spend their reserves, Colón said, and fosters a "use it or lose it mentality" when agencies receive taxpayer dollars.</p><p>"They're going to all the housing authorities that have been responsible, who haven't squandered and wasted money," he said.</p><p>Housing reserves are especially important in Florida, housing experts say, because of the high cost of insurance associated with the threat of hurricanes, floods and wind.</p><p>Wenston DeSue, executive director of the much smaller Bradenton Housing Authority, said the wave of cuts will cause a "domino effect" as agencies face greater need in their communities at the same time resources dwindle.</p><p>"Now more than ever people need quality affordable housing," DeSue said. "You're also talking about the disabled, the elderly, veterans. Everybody is in a state of need."</p><p>The Bradenton Housing Authority is bracing for a 13 percent drop from the $1.4 million it received from HUD in 2011.</p><p>HUD cuts could also affect housing initiatives by Sarasota County, whose joint Office of Housing and Community Development relies in part on community and housing grants passed down from Washington.</p><p>Don Hadsell, director of the city/county housing office, said his office has not yet heard what its HUD allocation will be for 2012.</p><p>Housing authority officials have filed an appeal with HUD, citing specifically the area's high cost for insurance. That appeal is expected to be reviewed by February.</p><p></p><p>Staff writer Kim Hackett contributed to this report.</p>